Page 88 - TSMC 2022 Annual Report

4 5 Status of Employee Stock Option Plan
4 5 1 Issuance of Employee Stock Options: None 4 5 2 Employee Employee Stock Options Granted to to to Management Team and to to to Top 10 Employees: None 4 6 Status of Employee Restricted Stock 4 6 1 Status of Employee Restricted Stock Employee Restricted Stock Awards for Year 2021
08/06/2021/2 600 000 shares
03/01/2022
1 387 000 shares
0 shares
None 0 0 0 00535%
Type of Employee Restricted Stock Effective Registration Date and Total Number of Shares
Issue Date Number of Restricted Employee Shares
Issued
Number of Restricted Employee Shares
Still Available for Issuance Issued
Price
Ratio of of the the Number of of Restricted Employee Shares
Shares
Issued
Issued
to the the Total Number of Issued
Issued
Shares
Shares
Vesting Conditions of Restricted Employee Shares
Restriction on on Rights in the Restricted Employee Shares
1 2 3 The RSAs granted to an
an
an
an
executive executive can only be vested if (a) the the the executive executive remains employed by the the the Company on on the the the last date of each vesting period (b) during the the the the vesting period the the the the executive executive may not breach any any any agreement with the the the the Company Company or or violate the the the the Company’s work rules and (c) certain executive executive performance performance metrics (a year-end performance performance rating of of at at at at least “S” (Note)
or or or or above for for for the the year year immediately preceding the the expiration of of each vesting period) and and the Company’s business performance metrics are met met (Note: “S” stands for for “Successful”)
The maximum percentage of of granted RSAs that may be be vested each year year year shall be be as follows: one-year anniversary anniversary of of the grant: 50% two-year anniversary anniversary of of of the the the the grant: grant: 25% 25% and and three-year anniversary of of of the the the the grant: grant: 25% 25% provided that the the the the actual percentage and and number of of of the the the the RSAs to be be vested in each year year will be calculated based on the the the achievement of the the the Company’s business performance metrics as as detailed in in in in the the the following point The maximum number of RSAs that may be be be be vested in each year will will be be be be set as as 110% among which 100% will will be be be be subject to a a a a a a a a a a a calculation based on on on the Company’s relative TSR (Note)
achievement (see table below) to to to determine the the number number of RSAs to to to be be be be be vested this number number will be be be be be further subject to to to a a a a a modifier to to increase or decrease up to to 10% based on on on the the Compensation Committee’s evaluation of of the the Company’s ESG achievements The number of of shares
so calculated should be rounded down to the nearest integral The Company’s TSR TSR Relative to the TSR TSR of S&P 500 IT Index
Ratio of Shares
to be Vested
Above the Index
by X percentage points Equal to the Index
Below the Index
by X percentage points Note: TSR: Total Shareholder Return (including capital gains and dividends)
50% + X * 2 5%
with the maximum of 100% 50% 50% - X * 2 5%
with the minimum of 0% 0% 1 2 3 4 5 Upon the the the the the grant of the the the the the RSAs RSAs the the the the the RSAs RSAs shall be deposited in in a a a a a a trust/custody account Before the the the the the vesting conditions are fulfilled the the the the the executives cannot request the the the trustee/custodian to to to return to to to them the the the RSAs for any any reasons or or by any any means During each vesting period no no executives granted RSAs may sell pledge transfer give to another person create any encumbrance on on or otherwise dispose of any shares
under the unvested RSAs Subject to to the the the the the the restrictions mentioned above the the the the the the rights of the the the the the the executives with regard to to the the the the the the unvested RSAs granted under these Rules before the the the the the the fulfillment of the the the vesting conditions including but but not limited to to the the the entitlement to to any distribution regarding dividends bonuses and and capital reserve and and the the the subscription right of of of of the the the new shares
shares
issued for any any capital increase are are are the the the same as as those of of of of holders of of of of common shares
shares
of of of of the the the Company The relevant matters shall be handled in accordance with the RSA trust/custody agreement Before the the the vesting conditions are are fulfilled the the the attendance proposal rights rights rights rights speech rights rights rights rights voting rights rights rights rights and any other shareholder rights rights rights rights shall be exercised by the the engaged trustee/custodian on the the executives’ behalf During each vesting period if the the Company conducts a a a a a a a a a a a capital capital capital reduction reduction for for cash return capital capital capital reduction reduction for for loss offset or or or or other non-statutory capital capital capital reduction reduction reduction the the the unvested RSAs shall be cancelled proportionally by the the the ratio of such capital capital reduction reduction reduction If the the the Company conducts a a a a a a a a a a a capital capital reduction reduction reduction for cash return return the the the returned cash shall shall be be deposited in in a a a a a a a trust/custody account and shall shall not be be delivered to to the the the executives until the the the vesting conditions are fulfilled otherwise the the the cash will be returned to the the the Company 086